Stellar Whitepaper

The Stellar Consensus Protocol: A Federated Model for Internet-level Consensus

“This paper introduces a new model for consensus called federated Byzantine agreement (FBA). FBA achieves robustness through quorum slices—individual trust decisions made by each node that together determine system-level quorums. Slices bind the system together much the way individual networks’ peering and transit decisions now unify the Internet.

We also present the Stellar Consensus Protocol (SCP), a construction for FBA. Like all Byzantine agreement protocols, SCP makes no assumptions about the rational behavior of attackers. Unlike prior Byzantine agreement models, which presuppose a unanimously accepted membership list, SCP enjoys open membership that promotes organic network growth. Compared to decentralized proof of-work and proof-of-stake schemes, SCP has modest computing and financial requirements, lowering the barrier to entry and potentially opening up financial systems to new participants.”

“The Stellar Consensus Protocol white paper can seem complex because it’s not blockchain. The protocol is more like an evolution of blockchain and that’s a good thing. The paper highlights key features: decentralized control, low latency, flexible trust and asymptotic security. Of these four features, proof of work blockchains are only capable of decentralized control and even that can be compromised as we have seen in Bitcoin.

The protocol works through the use of quorums, which are a set of nodes used to reach an agreement. The Stellar network is able to process a large number of transactions quickly and for fractions of a penny because there is no mining involved. The quorums securely reach consensus by exchanging signatures. For a better understanding of how this works, I encourage you to read the white paper but what we are left with is a platform that solves blockchain’s shortfalls right now.”